New loan applications for home purchases increased 19% from one week earlier as customers scrambled to get the process started in a rising interest rate environment, according to the Mortgage Bankers Association.
The MBA’s Weekly Mortgage Applications Survey for the week ending Nov. 18 found that overall activity increased by 5.5% but the refinance index decreased 3% from the previous week to its lowest level since January 2016.
The unadjusted purchase index increased 13% compared with the previous week and was 11% higher than the same week one year ago.
The market share of refi applications decreased to 58.2% from 61.9% the previous week.
“Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016,” said Michael Fratantoni, chief economist and senior vice president of research and technology at the Mortgage Bankers Association.
Refinance activity was particularly affected by fewer applications for Federal Housing Administration and Veterans Administration loans, he added.
The adjustable-rate mortgage share of activity increased to 5.2% of total applications, while the FHA share decreased to 11.7% from 12.2%.
The VA share decreased 1 basis point to 12.5% and the USDA share increased 2 basis points to 0.8%.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to 4.16% from 3.95%. For 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000), the average contract rate increased to 4.04% from 3.89%.
The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.9% from 3.73%, while for 15-year fixed-rate mortgages backed by the FHA, the average increased to 3.35% from 3.15%.
The average contract interest rate for 5/1 ARMs increased to 3.24% from 3.11%.